Thank you for your letter about the Trade and
Industry Committee's interest in the impact of NETA and the Climate
Change Levy on industry. Our statisticians have provided the following
figures.

The Climate Change Levy (CCL) came into effect
on 1 April 2001. Estimates indicate that, on average, the CCL
increased the average prices of fuels to industry in the second
quarter of 2001 by 13 per cent for coal, 8 per cent for electricity
and 7 per cent for gas compared to the price excluding the levy.

Average industrial gas prices (including the
CCL) rose by 51 per cent in real terms in the year to the second
quarter of 2001, reflecting increases in the price of gas in world
markets and the impact of the CCL.

Average industrial electricity prices (including
the CCL) fell by 4 per cent in real terms in the year to the second
quarter of 2001. The New Electricity Trading Arrangements (NETA)
and plant divestments are thought to have contributed to this
fall.

I enclose for the Committee's information copies
of the September 2001 edition of the DTI publication Quarterly
Energy Prices and the accompanying press release[50],
which give more detail. The next edition is due to be published
at the end of December and is expected o show a similar picture
on prices.